Insurers offer physicians incentives to improve patient care

Sasha Rios gives a flu shot at UT Medicine’s primary care clinic. UT Medicine is teaming with Humana on accountable care. The insurer will offer incentives to physicians who achieve specific improvements in the health of Humana’s commercial insurance customers.

Sasha Rios gives a flu shot at UT Medicine’s primary care...

Health insurance companies are joining physician practices in new business ventures that will allow both sides to share savings if the doctors improve patient care and reduce costs.

Known in the industry as accountable care or value-based care, the arrangements offer incentive payments to physicians who make their patients healthier. Traditionally, doctors have been compensated according to the volume of medical procedures and tests they perform.

In the past, these cost-saving efforts focused on Medicare or Medicare Advantage patients. Now insurers are pursuing similar strategies for patients with commercial health insurance.

On Friday, Humana revealed it will join UT Medicine in such an endeavor. The insurer will offer financial incentives to UT Medicine’s primary care physicians who achieve specific improvements in the health of Humana’s commercial insurance customers. UT Medicine is the University of Texas Health Science Center’s medical practice arm.

Health & Family

Earlier this month, Humana said it formed a similar arrangement with a local primary care practice it owns, Partners in Primary Care.

Although the endeavors are a first for Humana in South Texas, they are similar to those the company has with at least 20 other physician practices around the country, said Chip Howard III, Humana’s market vice president of provider development.

“One of the purposes of a value-based program is to slow the skyrocketing cost trends,” Howard said. “So to the extent that these programs are successful, it reduces (the) trend and then reduces cost. ... Ultimately, that translates to premium decreases.”

Accountable care can take many different forms, but the federal government defines such organizations as health care providers “who come together voluntarily to give coordinated high quality care” to patients.

The South Texas market was ripe for such ventures because of the diabetes and obesity rates here. Humana noted 14 percent of San Antonio residents have diabetes — twice the national average — while more than 17,000 of the insurer’s commercial customers here have been diagnosed with Type 2 diabetes. San Antonio had an obesity rate of 28.5 percent in 2012, Humana officials said.

Humana’s programs will track four health metrics in patients — long-term average blood glucose tests for diabetics, breast cancer screenings, patients’ medication compliance and avoidance of antibiotics in adults with acute bronchitis. Not all of those will be necessarily applicable to all patients.

“We really hope to improve our relationship and partnership with Humana,” said Edward “Toby” Kennerdell, UT Medicine’s director of managed care. The undertaking “is going to require a level of collaboration with Humana that we haven’t had in the past, because there’s going to have to be more sharing of data and information about the patients and their care.”

Doctors decide if they want to participate in the effort. Primary care physicians who opt in and improve Blue Cross customers’ health at lower costs can share the savings with the insurer’s customers.

The collaboration has established five physician-led accountable care groups around Texas so far, including one in the San Antonio and New Braunfels area involving 43 doctors from different primary care practices, said CEO Lou Goodman.

The others are in Houston, Kerrville, the Columbus-Gonzales area and the Nacogdoches-Henderson area. Two more likely will be set up in Dallas and Lubbock, Goodman said.

Like Humana, the collaboration will choose a set of criteria to track as an indicator of whether patients’ health improves. The tracking will begin Jan. 1 for all of the markets, but the criteria may vary among the markets.

Before the collaboration launched in February, independent physicians in Texas had little opportunity to join such ventures unless they became employed by hospitals, a move that typically raises their fees around 20 percent, said Dr. Dan McCoy, Blue Cross’ chief medical officer.

“Many of the first accountable care organizations in Texas ... were based around hospitals,” McCoy told the San Antonio Express-News Editorial Board recently. “We really got concerned because some hospitals were slapping the word ‘ACO’ on a hospital ... but they weren’t really transforming care. They were just raising the cost.

“We wanted to know, is there something we could do to help stabilize that and provide (physicians) the tools and the technology and the capital that they needed to be able to build these value-based care systems, or accountable care organizations, outside of a hospital?”

Such arrangements are one way companies are trying to stay competitive in a shifting health care market, according to Dr. Ed Schumacher, chair of Trinity University’s health care administration department. Insurance companies want to stay in the game and share risks with providers.

“Even though we’re all making tons of money in that old world, they realize that’s not going to continue,” Schumacher said. “Some of this is just competitive pressures — if Blue Cross Blue Shield doesn’t step up, somebody else will. And that’s the fear, especially as you see all the mergers happening in insurance companies.”

That’s not necessarily bad for consumers, Schumacher added, “because it results in better outcomes and lower costs. And that’s what we want competition to do.”

For their part, doctors know much of the health care industry is embracing value-based business models; even if they don’t like the idea, some doctors are jumping on board now, while others are waiting to see what happens, Schumacher said.

Some physicians were displeased with TMA’s decision to collaborate with Blue Cross. In a letter addressing their concerns, Dr. Austin King, then president of the TMA, said change is coming and physicians need to be innovative.

“The balance of power has shifted,” King wrote to physicians questioning the move. “Hospitals are gobbling up physician practices. Medicare and Medicaid are imposing reams of rules that intrude deeply into how we practice. We need to rewrite the future of health care.”

TMA PracticeEdge eventually may contract with other health insurance companies as well, Goodman said. Blue Cross was the first to commit and is a minority investor in the endeavor. But Texas Medical Association will always have majority control, King’s letter said.

In years past, some businesses may have moved too quickly toward accountable care without fully understanding it, Schumacher said.

“I think there was a definite craze to quickly form an ACO before we even really knew what an ACO was,” he said. “The joke was there’s this unicorn called an ACO, nobody’s ever seen one before, but we all talk about them. ... There were a lot of things that were called ACOs that weren’t doing a lot of good for the sake of the patients.”

Businesses today have a better grasp, Schumacher said. “I see us doing a better job of understanding what’s required to do those correctly.”